The reasons behind tuition increases

Like many universities, during the spring semester USF announces its tuition and fee rates for the following academic year and sends the announcement to continuing students (as well as the parents of undergraduate students). This year, we received a lot of pushback from students because we had not included information about why tuition was going up next year. A grassroots group of students formed and mounted a protest during our Board of Trustees meeting earlier this month. Our student newspaper, The San Francisco Foghorn, published an op-ed and staff editorial complaining about the lack of transparency.

In response, I sent a letter to the editor explaining the reasons behind the increase (I’ve also included the letter below). In addition, Jeff Hamrick, Vice Provost for Institutional Budget, Planning, & Analytics, sat down with an editor from the Foghorn for its podcast series to talk about the university’s budget and tuition increases. The leadership of the university will also be holding an open forum later this semester to provide an opportunity for students to share their concerns about the tuition increase.

We learned a lot in this process; we learned that we need to explain better to our students the reasons behind tuition increases, as well as how the increased tuition will be used to improve their educational experience at USF.

We strive to keep our tuition increases each year to a reasonable level, which can be a challenge given our fairly limited resources.  Our endowment is approximately $400 million, which is not very large compared to many of the institutions with whom we are competing when it is spread across our 11,000 students. The reality is that most of the over $100 million in scholarships that we provide to our students each year comes from our operating budget.

Our graduating seniors have an average level of student loan debt of less than $30,000, a reasonable amount for someone with a bachelor’s degree and less than the national average for graduates of 4-year institutions.  This fall we will have the public launch of our capital campaign, with one-third of the goal targeted for scholarships and experiential learning opportunities for our students.

We believe that these efforts, along with the strong educational experience we offer, will allow us to keep a USF education affordable and an excellent value for all of our students.

I write to respond to the recent Foghorn staff editorial (“Your Tuition Announcement is Not Enough”) and the op-ed by John Iosefo (“Hey, USF, Show me the Money”) in the April 4 issue. These two articles took the USF administration to task for not doing enough to explain the reasons behind the recently announced increase in the university’s tuition and fee rates for next year. Both of these articles are correct – we did not do a good job describing those reasons. Additionally, our conversations with students made it clear that we need to take a close look at the timeline of how we notify students and families about tuition and fees increases.

First, I want to provide more context regarding the tuition and fees increase for the year ahead.

An important driver behind the larger percentage increase in the tuition rate for next fall (set to increase 4.6 percent, as compared to a 3.9 percent increase for this year) is the increasing inflation rate in the Bay Area. At the time the Board of Trustees set the tuition increase (which it does annually in December), inflation as measured by the Consumer Price Index was running at an annual rate of 4.4 percent, an increase from an inflation rate of 2.7 percent at the same time last year. While the rise in the rate of increase of tuition for next fall will be 0.7 percentage points, this is below the increase in the rate of inflation of 1.7 percentage points.

Second, like most employers, the university’s costs of compensation for its employees continue to rise. The largest component of the university’s operating budget (over 50 percent) is the salaries and benefits of our employees, which we strive to keep competitive so that we can recruit and retain high quality faculty and staff who can offer the best education for our students. Higher rates of inflation, as outlined above, drive up all of the university’s costs, including compensation for its employees.

The third factor behind the rise in tuition prices is an increase in our financial aid budget. We will be increasing our overall scholarship budget – which goes to support the great majority of our students, undergraduate and graduate, new and continuing – by approximately 10 percent above this year’s level of spending.

The last category I will point to that fuels the increase in our tuition rates is the strategic investment the university is making in key areas to benefit students. For example, we will be adding another clinician in Counseling and Psychological Services, to allow us to better meet the growing demand for its services from our students, as well as an additional patrol officer in Public Safety. Students will also benefit from the addition of another campus disability shuttle and the drivers to operate it.

Each year, before the Board of Trustees sets the tuition rates for the following year, the administration conducts a comparative analysis of tuition prices and rates of increase at our competitors locally and across the nation. Our goal has been and will be to keep our tuition increases in line with those of our competitors, so that we are not pricing a USF education out of the market for our students.

I hope all members of our community will also keep in mind that beyond budget and economic realities, critical to decision-making regarding tuition and fees are USF’s foundational mission and values. USF administrative leadership and our Board are fully committed to an operating structure that supports all members of our diverse, inclusive community, especially to our students who are enrolled and thriving here. In fact, a major part of the strategic investment we are making in our budget in support of our mission includes the new positions in CAPS, Public Safety, and the disability shuttle I mentioned earlier.

The reaction to the university’s tuition and fees increase clearly shows we have more work to do in terms of communicating important decisions like these. We hear you. Last week, I, along with Vice Provost for Student Life Julie Orio, and Vice Provost for Budget, Planning, and Analytics Jeff Hamrick, met with three leaders of Dons for Fair Tuition, the ad hoc group of students that came together to protest the tuition increase at the university’s Board of Trustees meeting. In that gathering, we committed to hold an open session before the end of the semester to provide students with an opportunity to voice their concerns regarding the impact of the tuition increases on their ability to successfully complete their degrees here at USF, and for the administration to talk more about the rationale for the increases. I look forward to that opportunity to hear and engage with our students.

Donald E. Heller
Provost and Vice President of Academic Affairs
Professor of Education